DON'T GO IN THE CELLAR The strange double life

The strange double life of Mark Anderson

Flames climbed into the sky that Wednesday in 2005; the fire was seen from Highway 37 as well as from Vallejo, across the water from the former naval base at Mare Island. The old munitions storage building with 3-feet thick walls was thought to be all but fireproof, which is important when you’re storing torpedoes. The 35-foot-high walls, concrete roof and steel doors challenged firefighters to put the conflagration down, as a parade of fire trucks—lights blazing and horns blaring—joined the fight. The inferno went to eight alarms, and the temperature inside the building reached 2,000 degrees as 80 firefighters battled the flames. More than six hours later, the fire was brought under control, though it smoldered well into the next day and two firefighters were injured in the process.

All told, the fire would cause $10 million in damages to the building. But that was mere pocket change compared to the damage to the goods stored inside. The 240,000-square-foot building was leased by  Wines Central Inc., a company that specialized in storing fine wines and foods. Besides $2 million worth of sugar from C&H, there was pasta and olive oil. But most of the building was filled with wine—from 92 different wineries and 43 different collectors. The wine destroyed in the fire totaled a $250 million loss, but that figure didn’t begin to measure the real costs—in both dollars and emotions—for the wineries that lost everything.

The Alcohol, Tobacco and Firearms agency was called in to find the cause of the blaze, joining the Vallejo Fire Department, Solano-Napa Arson Task Force and the Vallejo police. Less than a week later, they called it arson—and one of the first people they questioned was Mark Anderson.

The list of reasons the authorities wanted to sit down with 58-year-old Anderson was long. To begin with, the fire started in the 2,500 square feet Anderson leased from Wines Central for his wine storage business, Sausalito Cellars. Reason number two for urgently wanting a chat was that Anderson was spotted in the warehouse prior to the blaze. Though Wines Central had asked Anderson months before to vacate his space (for reasons co-owner Jack Krystal refuses to discuss with the media), there were still odds and ends in the warehouse. The final reason the ATF wanted quality time with Anderson: He had 10 counts of embezzlement pending in Marin County. The Marin County District Attorney alleged Anderson had sold wine belonging to his clients for his own profit. ATF agents worried that Anderson might have set the fire to cover his tracks regarding some of those charges or, possibly, crimes that had yet to be discovered.

Setting the standard?

Anderson originally operated Sausalito Cellars out of a peach-colored, three-story building redeveloped from a 57-year-old Quonset hut structure on the Sausalito waterfront. His website advertised his business as a climate-controlled environment “setting the standard—nationally and internationally” for sheltering prized wine in “protected solitude.”

Sausalito is a moneyed enclave with a postcard view of the San Francisco Bay. Bridgeway, the main street in the Marin town, is alive with tourists hunting t-shirt shops and art galleries. The sidewalks are clogged with visitors from Europe and Asia carrying shopping bags and posing for photos. Locals tend to avoid the scene, favoring Caledonia Street, a boulevard of bookstores, eateries and clothing shops to the north.  Sushi Ran , one of the best restaurants in town, is found there, a tribute to sashimi and tempura. It’s also the very place Mark Anderson held court, cracking eggs over his noodles so often that his photo adorned the restaurant wall.

His photo is no longer there, and Anderson no longer enjoys California rolls as part of his diet, since he’s become a guest of Uncle Sam. He was arrested March 16, 2007, after a federal grand jury indicted him on 19 different counts including arson, fraud and tax evasion. He now calls a cell in Sacramento home—at least as he awaits a trial likely to commence in spring of 2009. But we’re getting ahead of ourselves in the tale of how $250 million worth of wine went up in smoke, and Mark Anderson went from appointed city official, bon vivant and oeonphile to bunking at the Blue Roof Inn.

Volunteer of the year?

Anderson sat on the board of the  Sausalito Art Commission . He was a member of the  Sausalito Park and Recreation Committee and volunteered for the Sister City Program. He wrote a column called “Mark My Words” in the hometown newspaper, the  Marinscope , complete with a Dorian Gray-like photo. A photographer of some skill, his work was shown in the  Sausalito Art Festival . “In his own way, Mark was kind of a Renaissance man,” says Martin Brown, a Marin journalist who knew Anderson and published his writings and cartoons in a now-defunct newspaper called the Sausalito Signal. (Full disclosure: I wrote for the Signal for a time, but never socialized with Anderson, though I did meet him a handful of times in the paper’s second floor walk-up office.)

Anderson was a man about town, often dining out at local eateries. Dressed in enough black to make Johnny Cash proud, the bespectacled Anderson was easy to spot, as he tipped the scales north of 300 pounds. He walked along Bridgeway, his gray ponytail bobbing off the back of his head as he greeted friends and merchants. “He always had a joke or the latest bit of town gossip,” says Tom Stern, a copyeditor who worked with Anderson at both the Signal and the five weekly Marinscope community newspapers. “He was playful, not malicious.”

Anderson was a regular at charity events, writing checks and chatting up partygoers. He was a member of the  International Wine and Food Society . The local Rotary Club counted him among its membership. He was a world traveler, with Asia and the tropics among the stamps in his passport.

There are guys who can weave a tale, painting a picture of a time and a place. They have wit and timing, and ears for how people sound. These storytellers hold your gaze, cradling your attention with seemingly little effort. Mark Anderson is one of those guys. He made entrances in a world where the rest of us simply walk in. “No pun intended, but Mark was larger than life,” Brown says, the irony crystal clear even over the phone.

But it was the stories about Anderson that provided the context for his life. More than one person around town noted that Anderson, a graduate of  UC Berkeley with a history degree, had told people he’d managed the rock group Iron Butterfly. Another tale had him trying his hand at sumo wrestling while on a visit to Japan. “He told me once he was involved with the guy who invented voice mail,” Brown recounts.

The trouble is, nobody in Iron Butterfly knows who Anderson is. Though Anderson graduated from San Francisco Law School , he failed in several attempts to pass the bar. “He had to stop writing at the Scope when one of the editors found he’d turned in a column that wasn’t his,” says Paul Anderson, (no relation) the one-time owner and publisher of the weekly newspaper.

In 1999, Mark Anderson opened Sausalito Cellars with cash from his dad. It catered to those who were wealthy enough to collect wines but not quite wealthy enough to have room to store it at home. But he also reached past the landed gentry who hadn’t thought to include a cellar in their digs. He began storing wine for collectors, clubs and restaurants. And for four years, the hefty entrepreneur made a living keeping wine tucked away for collectors from as far away as Japan.

But the wheels began to come off very quietly as the holiday season loomed in 2003. Sam Maslak, a partner in a defunct South San Francisco restaurant called Bacchanal, told Anderson to prepare the wine he’d had in storage since 2001 for shipment to Christie’s in New York for auction. When the movers showed up, most of the wine didn’t. Hundreds of cases were missing—and those bottles were worth $648,723. When a shocked Maslak inquired about the missing vino, according to the Sausalito police, Anderson’s response was that he’d never received all of the wine.

Sergeant William Fraass of the Sausalito police is a third-generation cop, his father a former chief of police in the same town where Fraass now plies his investigative trade. After Maslak showed up at the portable buildings that the Sausalito police call a cop shop, Fraass dug in, questioning Anderson and looking at his business. On February 19, 2004, Fraass turned in his report to the Marin County District Attorney. Less than a week later, Fraass arrested Anderson on embezzlement charges.

The people in Sausalito were shocked when Anderson, a photographic artist, ended up on the business end of a mug shot. “I couldn’t believe it,” says Paul Anderson, “It was like, ‘You have to be kidding me. Not Mark.’”

Sausalito is a small town, and word of the arrest made its way around in quick fashion. “When I heard that Mark had been arrested, it made no sense,” says Stern. “He didn’t seem capable of such a horrible deed. He always gave the impression of having money, never being worried about anything.”

No visible means of support

Stern is hardly alone in his belief that Anderson came from money. No one interviewed for this story could say what Mark did to make ends meet before the wine storage business, only that he lived well. According to the Sausalito police, they’d heard he’d inherited as much as $50,000 when his mother died. There was also a rumor of $1 million made from a land sale. His estranged brother, Steven, of Windsor, told the  San Francisco Chronicle that Mark started the wine business with money from his father.

For Fraass and the Sausalito gendarmes, Anderson’s income before Sausalito Cellars wasn’t really the point. In June 2004, Anderson’s second victim, the Sausalito Chapter of the International Wine and Food Society, came forward. It seems the club, of which Anderson himself was a member, was preparing for a tasting event in Beverly Hills when it went to retrieve its wine. The club had special status with Anderson’s business, as it had its own key to gain direct access to its collection. The trouble is, when club chairman Jack Rubyn arrived to pick up the wine, he found the collection in disarray. Much was missing, including a 1959 bottle of Château Lafite Rothschild valued at $29,000. All told, the society was missing 482 bottles, worth $282,289, from its collection.

One month later, the  Society of Medical Friends of Wine found its collection was short 96 bottles with a value of $14,400. According to Fraass, Anderson blamed the missing wine on bumbling employees.
Two more victims soon emerged. Kim Lambert went to clean his collection out of Anderson’s facility only to be told that he couldn’t receive the wine until he paid past due storage fees he never knew about. When he did receive his wine, it was a case short, costing him $1,200. Paul Emery was the next victim, missing 97 bottles worth $4,259.

Christmas brought four new embezzlement counts for Anderson—but that number would grow. Ron Lussier found his collection short 43 bottles worth $4,671. The bad news for Todd Cortell was 31 bottles worth $2,612. Jeffery Knowles lost 26 bottles worth $3,230. A New York collector named Mark Seacrest found out that 696 bottles in his collection had sprouted legs and walked, leaving a $114,958 price tag behind. Alan Bedwick, an investment banker who lived in Japan, hired a private investigator to retrieve his wine. The gumshoe came back telling Bedwick his collection was light almost 500 bottles at a cost of $112,375.

Perhaps the saddest case belongs to Keith Ogden. He’d stored his wine with Anderson from 2001 until 2005, when he built his own cellar in his home. A dispute over who’d pay to have the wine moved delayed the wine transfer. When Ogden agreed to pick up all the charges, he found his collection was 404 bottles shy, at a cost of $53,723.

On September 16, 2005, the complaint against Anderson was again amended to include more victims. The investigation by Fraass had uncovered that 8,082 bottles worth $1.252 million were missing from various collections. Anderson had sold 4,423 bottles through four different commercial wine merchants, one as far away as Chicago. According to Fraass, Anderson blamed bad bookkeeping, poor inventory control, dishonest employees and wine lost in two different moves. By the way, none of Anderson’s clients claim to have been given advance notice of the move from Sausalito to Vallejo, or later to American Canyon (where he had begun to store some Sausalito Cellars inventory after being asked to leave Wines Central). This may be because Anderson was asked by landlords to vacate the spaces in both instances.

Sausalito buzzed with the continuing saga of Anderson’s tribulations. Nobody seemed to understand how the well-liked man about town could possibly be connected to such a sordid tale—nobody including Anderson. “A few times before the end, he called me and professed his innocence,” says Stern. “I guess he thought I could shape the coverage in the Scope.”

In the end, the media coverage of the Anderson affair helped bring him down. After the first two victims came forward, the Sausalito police put out a press release hoping to find other victims. The strategy worked and was repeated another time.

Less than a month after the Marin Superior Court brought 10 counts of embezzlement against Anderson, Wines Central was burned. Even as the fire was going to eight alarms, the ATF was calling Fraass at the Sausalito station, advising him that Anderson had been at the warehouse prior to the fire. Within the week, Anderson was questioned regarding the blaze.

Meanwhile, some of the 92 wineries that used Wines Central were sifting through the remains of the building; the pallets filled with collapsed cases, shards of glass and cooked wine. The roster of wineries that worked through their inventory in the days following the quarter of a billion dollar blaze included  Sterling Vineyards ,  RH Philips ,  Viader and  ZD .

Some wineries were hit hard. Pinot Noir aces  Sainstbury lost 2,900 cases of wine including library wines dating back to the early 1980s.  Von Strasser of Napa saw all of its 2003 vintage sacked, as well as 90 percent of its 2002 wine. Central Coast stalwart Justin lost 10,000 cases of wine, including its 2003 Cabernet Sauvignon as well as some of its trademark red blend Isocceles.

Arrowwood saw 11,000 cases of wine ruined, while newcomer Goldridge lost 1,200 cases of 2004 Pinot Noir.  Whitehall Lane lost 5,000 cases of its 2002 Cabernet Sauvignon, and  Sherwin Family Vineyards had to write off 1,600 cases of wine. All told, six million bottles of wine were lost in the fire.

Far more than wine was lost, however. Sainstbury, as well as others, lost heritage, a bottled history of achievement, a road map of how wineries established themselves from Mendocino to the Central Coast.

And many a hard lesson was learned. A cry was heard across valleys in all directions as wineries began to understand how their insurance carriers were handling the claims of lost wines and how those wines were to be valued. Many were shocked at the level of detail required and the low values tossed about for wines long considered to be top of the market.

Long Meadow Ranch Winery felt the effects of the fire in a substantial way. “The lost inventory was a terrible blow, but we also lost shelf space and placements on restaurant wine lists,” says president Ted Hall. “We’d developed a dual release strategy, where we’d release our ’98 Cab with the ’94 Cab, the ’99 with the ’95 and so forth. We held 25 percent of our releases in reserve, and that’s gone.”

Long Meadow Ranch has the bonus of its farm and ranch operations, so the relationships with chef-led restaurants helped keep its label front and center on wine lists. “We reorganized our network of distributors by coming up with some new relationships and refocusing others,” Hall says. The winery also rolled out a new Sauvignon Blanc and repositioned itself in the market from a price-point perspective.

Maybe the brightest example of lemonade from lemons comes out of  Tres Sabores Winery , led by winemaker Julie Johnson. Though her winery lost 2,000 cases of wine in the fire and her insurance company conducted its audit with all of the finesse of a proctologist conducting an exam with a beach umbrella, Johnson refuses to be bitter. “You find a way to get through it all,” she says. “During the middle of all the fallout from the fire, we were putting out our 2005 wines.”

While slogging through the burnt-out warehouse searching for her wines, Johnson found five cases that hadn’t been destroyed. The ATF wouldn’t allow any of the wine that had been through the fire to be sold, but that didn’t stop Johnson from finding a use for the 60 bottles. She took the wine, decanted it, reduced it down and used it as a base for a Zinfandel marinade and grilling glaze called “¿Porque No?” My high school Spanish served me well on the translation: “Why Not?”

The long arm of the law

On March 15, a federal grand jury returned a 19-count indictment against Anderson, alleging arson, interstate transportation of fraudulently obtained property, mail fraud, use of a false name and tax evasion. On March 16 at 1:04 p.m., Anderson was taken into custody at his Sausalito home overlooking the bay.

March 19 found the IRS, ATF, Vallejo fire and police along with Fraass and U.S. Attorney McGregor Scott taking their bows at a press conference unsealing the indictments and announcing Anderson’s arrest. Scott said Anderson set the fire to cover his tracks regarding crimes already committed.

On March 22, Anderson was released on the pledge of $500,000 bail and given until April 6 to find the cash. After coming up short, he was returned to federal custody where he remains today.

A former Anderson lawyer, Douglas Rappaport was quoted in the Marin Independent Journal defending his client from the arson charges. “He would have no motive whatsoever to set the fire. Mark may be the obvious culprit, as in the butler did it. But I’ve played enough Clue to know the butler never does it.” 
Anderson’s new mouthpiece, Mark Reichel of Sacramento, specializes in the defense of those bumping heads with the feds. Nothing is known of Reichel’s plans to defend Anderson, other than petitioning the court to move the trial from Sacramento to the Bay Area.

Sources close to the investigation say that, since Anderson’s record prior to the fraud and arson charges was relatively unscathed, perhaps the fire in Vallejo was the act of a man whose life was coming down around his ears. With finances unwinding and the Marin County District Attorney preparing a case that could keep Anderson from gazing out on the waters of San Francisco Bay for years, maybe he snapped.

At best, it’s a guess. For a guy who went to lengths to show people a life full of art and travel and nights on the town, the fraud that followed was sloppy at best. Based on the investigation by the Sausalito police, the only precaution Anderson took to avoid detection when raiding clients’ wines collections was to choose accounts that didn’t show much activity. When those clients came calling, Anderson made little attempt to hide the fact that wine was missing, blaming the absent bottles on thieving employees or bad paperwork.

In the end, one thing is clear regarding the curious tale of Mark Anderson: Nobody really knew him very well. We may all have masks we wear from time to time, secrets we choose to keep from the prying eyes of the world. But there’s no telling where reality left off and the surreptitious took up with Anderson. And his love or need for the covert cost too many people so much.

And, in the end, it may cost Anderson dearly. If the feds convict him of everything, he’s staring at 250 years behind bars—and that’s before Marin County gets its swings.